Withdrawing job over applicant’s support of women’s shelter may have violated Fair Housing Act

By Joy Waltemath

By Kathleen Kapusta, J.D.

Reversing the dismissal of a plaintiff’s Fair Housing Act (FHA) claim against Western & Southern Financial Group, which rescinded its employment offer to her because she signed a petition supporting a women’s shelter while it was engaged in a lengthy dispute with the shelter, the Sixth Circuit found she presented a plausible claim for relief. Her petition-signing to support the shelter fit within the meaning of the phrase “aided and encouraged,” and Western & Southern’s rescission of the employment agreement constituted an interference with that encouragement, the appeals court concluded (Linkletter v. Western & Southern Financial Group, Inc., March 23, 2017, Merritt, G.).

After she accepted a job with Western & Southern, the plaintiff signed an online petition supporting the shelter. Western & Southern then rescinded the agreement because she signed the petition while it was engaged in a real estate dispute with the shelter over its location in the same neighborhood as the company and its presence there interfered with the company’s “master plan for [that] end of town.”

Shelter removed. After the shelter refused to sell, the company engaged in a campaign to force a sale and the shelter residents sued. The parties eventually settled and Western & Southern bought the property and removed the shelter from the neighborhood.

FHA claim. The plaintiff sued Western & Southern and its senior VP of human resources claiming that the rescission of her contract in response to her supporting the housing rights of the shelter’s female residents violated FHA Section 3717. She argued that the defendants interfered with her employment because she encouraged the women of the shelter in the exercise of their rights under FHA Sections 3603–06. Specifically she claimed that she encouraged the rights in Section 3604(a)–(e) pertaining to anti-discrimination in the rental or sale of housing. The provision she sued under, Section 3617, protects individuals who “aided or encouraged” the rights protected by Section 3604.

Lower court proceedings. Dismissing her claim, the district court found she did not aid or encourage the women as contemplated by the statute. The court also dismissed her nearly identical state-law claim. The plaintiff appealed, arguing that Western & Southern used an illegal employment screening practice by disqualifying potential employees that advocate for the FHA and the Ohio Civil Rights Act.

Fair Housing Act. On appeal, the Sixth Circuit explained that the FHA not only prohibits discrimination against “any person because of race, color, religion, sex, familial status, or national origin” in the rental or sale of housing, it protects plaintiffs who “aided or encouraged” the statue’s enumerated housing rights. The plaintiff contended that by signing a petition she “encouraged” women to pursue their right to be free from sex discrimination in the rental or sale of housing under Section 3604, and that the defendants illegally retaliated by “interfering” with her employment.

Interference. Noting that rescission of an employment agreement can qualify as interference within the meaning of the statute, the appeals court found the defendants’ interference left the plaintiff with a distinct and palpable injury. Further, the Department of Housing and Urban Development has interpreted the statute in a manner consistent with the proposition that interference can refer to employment disputes. Moreover, said the court, because the language “interfere with” should be broadly interpreted to reach all practices that have the effect of interfering with housing rights, it found the scope of the statute extends to employers who cancel contracts in retaliation for FHA advocacy. Thus, the alleged interference appeared to be covered by the statute.

Aided or encouraged. To qualify for a Section 3617 claim, the interference must be in retaliation for a plaintiff having aided or encouraged another’s enjoyment of protected housing rights, the court explained, noting that the district court found the plaintiff’s “encouragement” in signing the petition to be minor. The allegations in the complaint, however, showed the action was concrete and important enough to alert the plaintiff’s future employer to her public support, and result in her termination. “If the encouragement is sufficiently concrete to lead to an individual’s firing, it is sufficiently concrete to state a plausible claim,” said the court. Finding that a plain-meaning understanding of “encouraged” clearly covers the act of signing a petition advocating support for a women’s shelter, the court concluded that interpreting “encouraged” to include the plaintiff’s action was is in keeping with both the plain meaning of the word and the overall purpose of the Act.

Nexus. While the defendants argued that the motivation for attempting to remove the shelter from the neighborhood was “economic,” not “sex,” and that financial motives excluded the case from the type of sex discrimination forbidden by the statute, the court pointed out that a violation of the FHA can be shown either by proof of discriminatory animus or of disparate impact or effect. The facts alleged by the plaintiff and detailed in the litigation between the shelter and the company were sufficient to state a valid claim that Western & Southern discriminated against the women of the shelter, the court concluded.

Nor was there a requirement in Section 3617 that the defendant-employer operate the housing shelter to violate the statute, said the court, finding that here, the defendants allegedly sought to remove housing designated for a protected class from the neighborhood. As a “non-houser” that allegedly denied housing rights to women, Western & Southern fell within the scope of the Act.

In reversing the lower court, the appeals court found that a factfinder could conclude that through the campaign against the shelter, Western & Southern interfered with housing rights under Section 3604 and that the plaintiff encouraged those same rights under Section 3617. For the same reasons, the court also reversed the dismissal of her state-law claim.

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